Starbucks Order Gives Ohio Mug Maker A Jolt

Bob Davis hand-dips mugs before they go into the kiln at American Mug and Stein in East Liverpool, Ohio. Most overseas companies have machines that can do this much faster.

Amanda RabinowitzWKSU

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Originally published on June 12, 2012 12:03 pm

For decades, when you slid into a booth at a diner or a local coffee shop, the waitress probably arrived with a standard-issue, off-white mug. More than likely that mug came from the Ohio River town of East Liverpool, which calls itself "The Pottery Capital of the Nation."

A lot of that city's pottery business is long gone. Now, one of the few remaining pottery factories in the battered town is pinning its survival on a major corporation.

To step inside American Mug and Stein in East Liverpool is to step into another era.

About 20 employees dressed in dust-covered aprons are here in a hot, dark plant under bare overhead light bulbs and swirling metal fans. They're pouring clay into heavy molds, smoothing the mugs' edges and dipping them in glaze. There's no automated assembly line or high-tech machinery here.

Owner Clyde McClellan is firing up one of the company's 30-year-old kilns.

"It's a dinosaur. It's beyond an antique," he says and laughs.

Just Weeks From Shutting Down

McClellan's ceramics company is one of the last in East Liverpool, located in Appalachia. He has been in the pottery business for 40 years and took over this company three years ago when it was just weeks from shutting down.

"I've been so close to going out of business so many times, my accountant ... he just doesn't know where to send the bill sometimes," McClellan says jokingly.

McClellan just completed his biggest order ever — 20,000 mugs for Starbucks. The sturdy, beige mugs are metal-stamped with the coffee giant's Indivisible brand on the front. They'll sell for $10 each.

Ulrich Honighausen owns Hausenware, the company that supplies the mugs, tumblers and other items that Starbucks sells. Generally, Honighausen sends his manufacturing work overseas.

But he wanted to design a product that could be made in America. "When these small towns and these small factories are supported by a large customer that believes in it, we can make it happen, we can bring it back," he says.

At McClellan's pottery factory, it takes one week to make each mug from start to finish, and the company was able to complete the huge Starbucks order in about six weeks. An overseas factory could produce twice as many in the same time. But McClellan says Starbucks was patient.

"They've come out, they spent time in my factory, they've listened. And that has made me really proud to do a good job for them," he says.

Doubling His Workforce

McClellan doubled his workforce for the job and so far has been able to keep them all employed — churning out a few thousand mugs a month in a continuing contract with Starbucks.

"It's life-changing for me," he says. "It's life-changing for the employees. I have employees here who have been unemployed for six months, a year, a year and a half."

Smoothing the edges of the mugs after they come out of the molds, Marcie Delauder says with hardly any jobs in town, she's relieved to have this one. Having the order from a big company like Starbucks, she says, makes "a big difference."

This partnership is one of several Starbucks initiatives launched in the past year, including creating a small-business loan fund through the sale of wristbands in its stores.

Building Customer Loyalty

It's an increasingly popular concept, says David Hessekiel, president of the Cause Marketing Forum. "People will be more loyal customers if they are aware of good works by a company if price and quality are roughly equal," he says.

Starbucks CEO Howard Schultz says the contract with American Mug and Stein is only the beginning.

"There are hundreds of East Liverpools around the country today," he says. "These towns have been left for dead. And even though it's more expensive to manufacture this mug in the U.S. than it would be in China or Korea or Mexico, this is what we need to do."

But McClellan says towns like his can't live only in the past. That's why he and a couple of partners just bought a shuttered pottery factory across town to outfit it with the newest equipment. Meanwhile, the original factory will continue to make mugs the old-fashioned way — by hand.

It's been the same for decades - if you drop by a diner or a coffee shop anywhere in the United States and order a cup of coffee, there's a good chance your cup of Joe will come in a standard-issue, off-white mug. And chances are that mug came from the Ohio River town of East Liverpool, which calls itself, proudly, the Pottery Capital of the Nation.

Most of the city's pottery factories shut down long ago, but one factory that's hanging on just got an important new customer. From member station WKSU, Amanda Rabinowitz reports.

AMANDA RABINOWITZ, BYLINE: To step inside American Mug and Stein in East Liverpool, is to step into another era.

(SOUNDBITE OF POURING CLAY)

RABINOWITZ: About 20 employees dressed in dust-covered aprons are here in a hot, dark plant under bare, overhead light bulbs and swirling metal fans. They're pouring clay into heavy molds, smoothing the mug's edges, and dipping them in glaze. There's no automated assembly line or high-tech machinery here.

(SOUNDBITE OF KILN FIRING)

RABINOWITZ: Owner Clyde McClellan is firing up one of the company's 30-year-old kilns.

CLYDE MCCLELLAN: It's a dinosaur. It's beyond an antique.

(LAUGHTER)

RABINOWITZ: McClellan's ceramics company is one of the last here in East Liverpool - located in Appalachia. McClellan has been in the pottery business for 40 years and took over this company three years ago, when it was just weeks from shutting down.

MCCLELLAN: I've been so close to going out of business so many times, my accountant - he just doesn't know where to send the bills sometimes.

(LAUGHTER)

RABINOWITZ: McClellan just completed his biggest order ever - 20,000 mugs for coffee-giant Starbucks. The sturdy, beige mugs are metal-stamped with Starbucks' Indivisible brand on the front. They'll sell for $10 each.

Ulrich Honighausen is here, too. He owns Hausenware, the company that supplies the mugs, tumblers and other items that Starbucks sells. Generally, Honighausen sends his manufacturing work overseas. But he wanted to design a product that could be made in America.

ULRICH HONIGHAYSEN: When these small towns, and these small factories, are supported by a large customer that believes in it, we can make it happen. We can bring it back.

RABINOWITZ: At McClellan's pottery factory, it takes one week to make each mug from start to finish. And he was able to complete the huge Starbucks order in about six weeks. An overseas factory could produce twice as many in the same time. But McClellan says Starbucks was patient.

MCCLELLAN: They've come out, they've spent time in my factory; they've listened. And that has made me really proud to do a good job for them.

RABINOWITZ: McClellan doubled his current workforce for the job and so far, has been able to keep them all employed, churning out a few thousand mugs a month in a continuing contract with Starbucks.

MCCLELLAN: It's life-changing for me; it's life-changing for the employees. I have employees here who have been unemployed for six months, a year, a year and a half.

(SOUNDBITE OF MACHINERY)

RABINOWITZ: Smoothing the edges of the mugs after they come out of the molds, Marcie Delauder says with hardly any jobs in town, she's relieved to have this one.

MARCIE DELAUDER: A big company like that, and we're going to be making the products for them. Really booming; from just me being in two years here, I've seen a big difference.

RABINOWITZ: This partnership is one of several Starbucks initiatives launched in the past year, including creating a small-business loan fund through the sale of wristbands in its stores. David Hessekiel is president of the Cause Marketing Forum. He says this concept is increasingly popular.

DAVID HESSEKIEL: People will be more loyal customers if they are aware of good works by a company, if price and quality are roughly equal.

RABINOWITZ: Starbucks CEO Howard Schultz says the contract with American Mug and Stein is only the beginning.

HOWARD SCHULTZ: There are hundreds of East Liverpools around the country today. These towns have been left for dead. And even though it's more expensive to manufacture this mug in the U.S. than it would be in China or Korea or Mexico, this is what we need to do.

RABINOWITZ: But McClellan says towns like his can't live only in the past. That's why he and a couple partners just bought a shuttered pottery factory across town ,to outfit it with the newest equipment. Meanwhile, the original factory will continue to make mugs the old-fashioned way - by hand.